Tesla & Panasonic In Talks To Expand Giga Nevada Hints Stronger Demand Ahead

Panasonic finance chief said the company is seeing strong demand for battery cells from U.S. partner Tesla and they are in talks to expand their joint plant in Nevada, which is now profitable. 

According to Reuters, Panasonic Chief Financial Officer Hirokazu Umeda said that negotiations are underway with Tesla to expand production facilities. “We are in discussions right now” about expanding the plant’s capacity, he said.

According to Umeda, this will be a necessity, since Tesla is experiencing growing demand. “We are seeing strong demand from Tesla” beyond the Nevada plant’s current capacity of 35 gigawatt hours per year, he said.

Source: asia.nikkei

Tesla partnered with South Korean LG Chem and Chinese CATL, which produce batteries for their cars. That is why it was decided not to build a new battery plant for Tesla in China.

In recent years, Panasonic’s relationship with the automaker has been very tense, but now we can see the positive changes, according to Umeda.

Tesla continues to report on profit for the third quarter in a row, which indicates the correct tactics of the company, which leads to high demand for its products.

The Nevada factory has been profitable for the second quarter in a row, which inspires Umeda. He hinted that Panasonic is developing new batteries with Tesla. “We will be working to improve materials and technologies throughout this financial year,” said Umeda.

Thanks to Tesla, Panasonic continues to make profit even in the coronavirus crisis. Now, due to supply disruptions and reduced demand, other products of the company do not bring them income.

Panasonic did not publish a profit forecast for the current year due to the uncertainty regarding the impact of the virus. Analysts forecast an average profit of 225.46 billion yen for the current fiscal year.

Last week, according to internal e-mails, Panasonic has resumed its work making battery cells at Tesla’s Gigafactory Nevada.

Featured image: Reuters